Equatorial Countercurrent

The venerable head and shoulders pattern, when studied using rigorous statistical methodology stripped of hindsight and other biases, has been demonstrated to work no better than a random signal. This is difficult for many TA practitioners to accept, since it is chapter one verse one in every TA tome ever written. It is a fact nonetheless.

This does not mean the H&S never works; even random signals work a large proportion of the time.

But the H&S will live on, since it is human nature to want to believe in it. If the H&S had worked like it was supposed to, everyone would be praising its virtues. But if it doesn't work, then the pattern is simply redefined into something else. This is not meant to be a criticism, just an observation about trading psychology.